1998 (3) TMI 423 - AT - Central Excise

Summary

Issues Involved: Classification of the product 'Spert' under the Central Excise Tariff Act, 1985.

Issue-wise Detailed Analysis:

1. Classification of 'Spert':
The central issue in both appeals is the classification of the product marketed under the brand name 'Spert'. The appellants sought classification under sub-heading No. 0404.00 of the Central Excise Tariff Act, 1985, as "other dairy produce; edible products of animal origin, not elsewhere specified or included." The Revenue classified the product under sub-heading No. 2107.91, which covers "edible preparations not elsewhere specified or included, put up in unit containers and ordinarily intended for sale."

2. Appellants' Argument:
The appellants contended that 'Spert' is a dairy produce correctly classifiable under sub-heading No. 0404.00. They referred to the erstwhile Central Excise Tariff, ISI specifications, and various expert certificates. They argued that 'Spert' is not a protein concentrate and thus should not be classified under sub-heading No. 2107.91. They also cited a Tribunal decision in the case of Collector of Central Excise, Pune v. Frozen Foods Pvt. Ltd., where 'Spert' was held to be a milk food.

3. Respondent's Argument:
The respondent (Revenue) argued that 'Spert' is a food supplement and not a dairy produce. While some ingredients might be dairy products, the final product is an edible preparation correctly classifiable under Chapter 21 of the Tariff, which covers miscellaneous edible preparations.

4. Analysis of 'Spert' Composition:
The Tribunal examined the composition of 'Spert', which includes proteins, fats, carbohydrates, vitamins, and minerals. The product is marketed as a food supplement with high nutrient density. The Tribunal noted that the product's ingredients include maltodextrins, non-fat milk solids, calcium caseinate, sucrose, and pre-digested cereal extracts.

5. Dairy Products Definition:
The Tribunal referred to various sources, including the Encyclopedia Britannica and the Kirk-Othmer Encyclopedia of Chemical Technology, to define dairy products. It was noted that while casein and calcium caseinate are by-products of the dairy industry, the final product 'Spert' is not a product of the milk processing plant or dairy processing industry.

6. Chapter 4 of the Tariff:
The Tribunal examined Chapter 4 of the Tariff, which covers dairy produce and edible products of animal origin. It was concluded that 'Spert' does not fit into the category of products consisting of natural milk constituents as defined under Heading No. 04.04.

7. ISI Specifications:
The Tribunal noted that 'Spert' is manufactured according to ISI specification 8220-1976, which is for protein-rich concentrated nutrient supplementary foods, not dairy products. The Indian standards on dairy products do not include protein-rich concentrated nutrient supplementary foods.

8. Harmonised Commodity Description and Coding System (HSN):
The Tribunal referred to the Explanatory Notes to the HSN, which excludes casein and food preparations based on dairy products from Chapter 4. This further supported the classification of 'Spert' under Chapter 21.

9. Previous Tribunal Decision:
The Tribunal discussed the previous decision in the case of Collector of Central Excise, Pune v. Frozen Foods Pvt. Ltd., where 'Spert' was not considered a milk food. The Tribunal noted that the product 'Spert' is a food supplement and not a dairy product.

10. Supreme Court Precedents:
The Tribunal referred to the Supreme Court's decisions in the cases of Collector of Central Excise v. Protein Products of India and Rollatainers Ltd. v. Union of India. These cases emphasized the importance of common parlance and trade understanding in classifying products.

11. Rules of Interpretation:
The Tribunal discussed the general rules for the interpretation of the Tariff, emphasizing that classification should be determined according to the terms of the heading and the relevant section and chapter notes. The concept of "essential character" was deemed irrelevant in this case.

Conclusion:
The Tribunal concluded that the classification of 'Spert' under sub-heading No. 2107.91 of the Tariff was correct. Both appeals were rejected, affirming the Revenue's classification of the product as an edible preparation under Chapter 21.